Under this deal Microsoft will receive a royalty for each Samsung device (smartphone and tablet) sold running Android. In addition to this, the two companies have agreed to cooperate in the marketing and development of Windows Phone.

"Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and we're investing to make that a reality," said Andy Lees, president, Windows Phone Division, Microsoft. "Microsoft believes in a model where all our partners can grow and profit based on our platform."

"We are pleased to build upon our long history of working together to open a new chapter of collaboration beginning with our Windows Phone "Mango" launch this fall," said Dr. Won-Pyo Hong, executive vice president of global product strategy at Samsung's mobile communication division.

Why has Samsung entered into this allegiance with Microsoft? Rumor has it that Microsoft was asking that Samsung pay a $15 royalty on each Android device it sold, but that this would be reduced to $10 in exchange for closer cooperation between the two companies.

The Android part of this deal is similar to a number of deals that Microsoft has entered into with Android device makers this year, including ViewSonic and Acer.

This move continues to press on the point made my Steve Ballmer, Microsoft CEO, earlier this year:

'Android has a patent fee. It’s not like Android’s free. You do have to license patents.'

Android is rapidly becoming Microsoft's favorite cash cow. I really have wonder if Microsoft cares whether Windows Phone lives or dies given how much cash it's making from Android.